If your business trades through a discretionary trust, there’s a development worth flagging now, while it’s still a draft and not legislated, it is being discussed
The 30% minimum tax
Labor’s 30% minimum tax on discretionary trusts is due to start on 1 July 2028. In short: trustees will pay a non-refundable 30% tax on income distributed to beneficiaries, which mostly bites when income goes to beneficiaries on a marginal rate below 30% (think adult children, part-time-working spouses, or family members with modest personal income). Many advisors had assumed the fix would mean restructuring into a company or a fixed trust which means copping the stamp duty that usually comes with it.
The proposed workaround
The government has now proposed a workaround. Rather than restructuring, Trustees would be able to keep their existing discretionary trust and simply opt into fixed distributions which would be a set, steady split to beneficiaries instead of a discretionary one each year. Do that, and the trust sits outside the new tax, without triggering a change of ownership for stamp duty purposes in most states.
It’s still a draft. Consultation on the legislation closes 18 September 2026, so there’s a short window for feedback before this locks in.
The proposed workaround
Why we’re raising it with our transport, labour hire wholesale and manufacturing clients specifically: discretionary trusts are the default structure across a lot of these businesses, and how income is distributed feeds directly into the financials a lender looks at , their trading history, beneficiary tax positions, and how the entity is set up all come into play when we’re assessing an invoice finance or asset finance application. A structure decision made now, ahead of 2028, can affect how clean that process is later.
What to do before your next finance application
If you’re a business owner planning your next equipment purchase or working capital facility, it’s worth a conversation now rather than after the legislation is settled. Two things worth doing before your next finance application:
- Talk to your accountant about whether fixed distributions make sense for your trust, and whether that decision has any flow-on effect for how a lender will view your structure.
- Get in touch with us early if finance is on the horizon. We can talk through how your current or proposed structure sits with lenders, so there are no surprises when you apply.
This isn’t tax or legal advice. Talk to your accountant or tax advisor about what’s right for your specific structure. We’re simply flagging it early because it’s relevant to how we assess finance applications for businesses like yours.